Oman VAT introduction early 2021
- Jul 4, 2020 | Richard Asquith
Oman is set to introduce Value Added Tax in early 2021 according the Economics Ministry. Oman would be the fourth of six Arab Gulf states to introduce VAT as part of a 2016 VAT union agreement.
The six states had agreed to implement a harmonised 5% regime. So far, only Saudi Arabia, UAE and Bahrain have done so. Saudi Arabia raised VAT to 15% on 1 July 2020 due to the collapse of oil prices during the COVID-19 pandemic.
Like the other oil-rich Gulf states, Oman has suffered from the drop in oil prices, and is looking to stabilise its revenues through the introduction of the consumption tax. The decline in oil revenue in recent years means Oman's sovereign debt as a percentage of GDP has been steadily increasing, and is expected to grow above 60 per cent this year, according to a note published earlier this month by Fitch Ratings.